Egypt’s PM To Liquidate CBE’s “Black Fund”

The Egyptian Prime Minister Hisham Kandil will issue a decree within the coming hours to liquidate the banking sector’s development and modernization fund also known as the “black fund”, which was established in 2005 upon a decree issued by the former Prime Minister Ahmed Nazif, according to the article no. 21 of the Cabinet’s decision no. 1865 for 2003.

Kandil will issue the decree no.20 for 2013 which stipulates that all cash balances of this find shall be transferred to its members according to the values of their contributions to the fund.

The Fund Secretariat will conduct the liquidation proceedings and set a financial position on the date of liquidation to be approved by the board of directors and reviewed by an auditor within 60 days since the effective date of the law.

The banking sector’s development and modernization fund has raised much debate in the last years as the Central Bank of Egypt never revealed the fund’s fiscal standing and refused to subject it to the scrutiny of the Central Auditing Organization. Therefore, many have named this fund “the black fund”, claiming that it wastes the banks’ funds and encourages corruption and illegal transactions at the Egyptian banking sector.

Public banks were required to donate 5% of their yearly profits to the fund, which also received donations from the CBE and other institutions that benefited from its programs.